When the City & South London Railway (C&SLR) was authorised in 1884, two prototype locomotives were built by Mather & Platt in 1889, to a design by Dr Edward Hopkinson, with Beyer-Peacock supplying many of the mechanical parts. No. 1 used motors mounted directly on the drive axles, while No. 2 had motors driven through gears. Trials were conducted in December 1889 with No. 1 and two passenger cars. No. 2 was also used for testing, but it is not clear whether it pulled any cars. A production run of 14 locomotives was then built, numbered 1 to 14, duplicating the original numbers 1 and 2. 

The locomotives were small and short to fit within the small diameter tunnels, which were 10 feet 2 inches (3.10 m) at the northern end of the railway, and 10 feet 6 inches (3.20 m) on the straighter southern section, to allow higher speeds. The cab was built along the centre line of the locomotive with a door at each end and the controls and equipment mounted on the sides. There was a single driving position at one end of the locomotive with the power controller on one side and the Westinghouse air-brake valve and hand-brake column on the other. The controls worked directly so no form of multiple-unit control was ever possible.

Each locomotive could haul three coaches at up to 25 miles per hour (40 km/h) on good track, providing a service speed of around 11.5 mph (18.5 km/h). At the end of a run, the arriving locomotive was trapped in the platform by its carriages. A replacement locomotive hauled the train away on the next trip and the released locomotive was then available to head the next incoming train (this is called "slip working").

The railway was opened on 4 November 1890 by The Prince of Wales (later King Edward VII) and locomotive No. 10 carried a commemorative nameplate with the name Princess of Wales to celebrate its use on that occasion